Orange have announced they will be handing over their fixed-line infrastructure to BT who will integrate it into their network. In return, Orange will piggy back on BT's national network which will provide a larger footprint to sell their broadband service from, and help them to provide a higher quality service. 61 orange staff will also transfer over to BT in the deal.
Currently, Orange's LLU network only reaches around 65% of the population, and they hold in total approximately 840,000 broadband customers. The company has had trouble keeping people on board, and this is shown by the decline in customers, down from 977,000 this time last year, although only 44% of this was LLU. Broadband has been a loss leader for Orange, and declining numbers have shown it lose £80 million last year on the business. Orange rank fifth in the broadband market, but continued decline would see it overtaken by rival O2 in the coming years.
"We are not satisfied with where we stand with broadband, as our customer base is declining and our performance is poor. But we need to remain in fixed-line broadband so decided to fundamentally change what we are doing."Bruno Duarte, (Vice-President of Strategy) Orange
Talking to The Times, Orange blamed ageing infrastructure that needed an investment boost to get it up to today's standards. The decision would perhaps allow the company to invest in marketing of the service, and will put the company alongside Vodafone who also outsource their fixed-line broadband service to BT. The deal will probably encourage Orange's partner company T-Mobile, following the merger of the two, to launch fixed-line broadband services based on this platform. With nearly 30 million mobile customers between them, there is definitely potential to bundle home and mobile services which will form a successful model.